UOMO Enters Into Joint Venture to Form Bassline
UOMO Media Inc. [[UOMO.OB]] entered into a joint venture agreement with Carl Erion and Brian Wills to form a newly created digital strategy and communications company called Bassline. The agreement provides the two men run for the newly formed company, while UOMO provides compensation of 50,000 shares of restricted stock as incentive. The two parties will split revenues 50/50, while UOMO will retain 51% control of the entity going forward.
The agreement first surfaced in a regulatory 8-K material agreement filing with the Securities and Exchange Commission (SEC). Unfortunately, no details of the newly created company were given other than the generic services provided and compensation structure. Interestingly, the contract notes that “all business and derivative business brought in by UOMO [will] be run through the newly created company.” However, there is a termination clause by either party after a certain time.
In the fourth quarter, UOMO Media reported revenues of $167,885 but lost money with a negative gross margin. Meanwhile, selling and administrative expenses of $157,569 led to a net loss of $158,184 for the three month period ended January 31, 2009. Meanwhile, the company reported cash of just $17,776 and current liabilities of $821,620. As a result, the company’s auditors have issued a going concern, noting that the company plans to raise additional funds.
UOMO shares have surged more than 600 percent over the past week before falling in recent sessions. Investors have been excited by the company’s celebrity clientele list and piled onboard. It will be interesting to see the details of this newly created company, Bassline, and how it affects the company’s revenues and bottom line going forward. In the meantime, prudent investors may want to watch this company from the sidelines until it starts generating tangible net income, and let speculators play the wild price movements.
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